Natural gas futures will advance next week as a surge of cold air boosts demand for the heating fuel, according to a Bloomberg News survey.
Eight of 11 analysts, or 73 percent, said prices will rise on the New York Mercantile Exchange through Jan. 10. Three predicted gas will fall. Last week, 44 percent of participants said futures would drop.
A winter storm yesterday brought frigid weather and snow to the U.S. East and Midwest. Early next week, the Midwest may see some of its lowest readings since January 2009, said Commodity Weather Group LLC.
“I’m a short-term bull,” said John Woods, president of JJ Woods Associates and Nymex floor trader. “When you see these stifling cold temperatures across the United States, it’s going to give you momentum up. If you look at the weather pattern, it doesn’t seem to be easing up.”
Natural gas for February delivery fell 8.6 cents, or 2 percent, to $4.321 per million British thermal units in three days of trading this week on the Nymex. The market was closed Jan. 1 for the New Year’s holiday.
Prices last week slipped 0.3 percent, halting a seven-week rally, as unusually cold U.S. weather eased. Buyers were getting back into the gas market after that round of profit-taking and prices may head up $4.55 or $4.60, Woods said.
A surge of cold air will sweep most of the lower 48 states through early next week with lower-than-normal readings lingering in the central and eastern states through Jan. 11, said Commodity Weather in Bethesda, Maryland.
The high temperature in Chicago on Jan. 6 will be minus 2 degrees (minus 19 Celsius), 34 below average, said AccuWeather Inc. in State College, Pennsylvania. The next day, New York City’s high will be 13 degrees, 15 lower than the norm.
About 49 percent of U.S. households use gas for heating, said the Energy Information Administration, the Energy Department’s statistical arm.
The gas survey has correctly forecast the direction of prices 51 percent of the time since its June 2004 introduction.
Bloomberg’s survey of natural-gas analysts and traders asks for an assessment of whether Nymex gas futures will probably rise, fall or remain neutral in the coming week. This week’s results were:
RISE FALL NEUTRAL
8 3 0
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